G1 Android Phone at Least $380 Cheaper Than iPhone

The T-Mobile G1 Google Android phone is seen as the iPhone’s strongest competitor with features such as an application marketplace and an open mobile operating system.

But for most consumers, the decision to buy the phone will largely be based on how much they will have to pay to own the device and keep it going. G1 hits retail stores on October 22 amidst a weak economy and fears that holiday spending could be hit.

A quick back of the envelope calculation shows G1 will be at least $380 cheaper than an iPhone over two years. That could tip the scales for many buyers in favor of the G1.

To be fair, it is not a completely apples-to-apples comparison. T-Mobile offers more minutes than AT&T for a comparable price and the two don’t have identical voice plans. T-Mobile also offers a bundled data plan that has unlimited data and text messages, while AT&T includes unlimited data in the cost of its voice plans.

The differences notwithstanding, you can still make a fair estimate.

Here’s how G1 and iPhone stack up in terms of total cost of ownership:

The G1 costs $180 with a two-year contract. Unlimited messages and data will be $35 a month. The T-Mobile voice plan that is closest to AT&T’s bundle for the iPhone is the 600 minutes and unlimited weekend plan for $40 a month.

So across two years, it works out to $1,980.

Now, a 8-GB iPhone costs $200 with a two-year contract. AT&T offers unlimited text messaging for $20 a month. The 450 anytime minutes and 5,000 night and weekend minutes plan, which includes unlimited data for e-mail and web browsing is $70 a month.